Resolvers are used as angular transducers. There is a growing need of resolvers of high output accuracy and smaller physical size. Such requirements are very difficult to meet by resolver design alone. In fact, higher accuracy is associated with larger physical size and higher cost. This invention provides a digital compensation technique which can improve the accuracy of a resolver by a factor of approximately ten. A low-cost, small-size, medium-accuracy resolver can thus be made into a high-accuracy resolver by using this invention. The cost of using this technique is very small when compared to the cost of a small-size, high-accuracy resolver, if such a resolver exists.